Scenes From the Geekfest at SXSW Interactive

A guy leans against a fence near a park outside the convention center checking updates on his iPhone. His black t-shirt reads "I'm ugly" in big print and "on the inside too" in smaller type. But, here, that's OK.

At South by Southwest Interactive in Austin, Texas, the geeks shine and weirdness rules. Melanie Typaldos walked her 100-pound capybara, the world's largest rodent, down the sidewalk Saturday. Another woman wore her dog like a scarf. A few men donned kilts. Women sported Mohawks and mullets. Both sexes showcased full-sleeve tattoos and multiple body piercings.

Celebrating its 13th year, SXSW Interactive, which kicked off Friday and runs through Tuesday, continues to grow in popularity. It spun off from the popular SXSW music and film festivals. Occasionally the three worlds collide, and the famous-famous like filmmaker Quentin Tarantino meet the geeks.

Six years ago, only 35 reporters and 3,000 people attended this show. In 2010, more than 400 top-tier press and 13,000 people are here, says Laura Beck, managing director of Porter Novelli in Austin, which handles SXSW's public relations.

This year, Tungle, an online scheduling service, and Plancast.com, an online calendar service, are big, Beck says. Everyone's also watching the face-off between Foursquare and Austin-based Gowalla for geo-location game applications, she says.

Geeks come here primarily to launch new products, learn, network and party. The parties stretch into the wee hours and generally have lines around the block. The Diggnation party on Saturday had an hour-long wait to get in. More than 100 people lined up for free beer at Dorkbot, another party that showcased new technology inventions.

The Internet pipes are holding up, too. Under the pressure of text messages, geo-locating check-ins from games like Foursquare and Gowalla, Twitter traffic and phones calls, AT&T's (T) network has worked well. It experienced sporadic outages last year, which caused a backlash among iPhone-toting tech lovers. This year, AT&T brought in several "cows," or portable satellite trucks, to handle the additional traffic.

Like Catholics Going to the Vatican

SXSW Interactive has also earned a reputation as a place where people come to reinvent themselves. They shed the skins of their former corporate life to become free-agent entrepreneurs. Hugh MacLeod, a marketing executive who moved from New York to Alpine, Texas, to become a cartoonist, manned a booth with his artwork in the exhibition hall. He says he's making a decent living as a digital nomad doing his own thing.

"Why do I go to #SXSW? For the same reason that Catholics go to the Vatican,'' MacLeod posted on Twitter to his more than 23,000 followers before making the seven-hour drive here.

For the show, Chris Heuer, founder of Social Media Club in San Francisco, rented a lake house for people to independently produce audio, video and blogging content. Singer and Songwriter Lyle Lovett stopped by on Friday to brush up on his social media skills.

SXSW creates "this magical sort of energy where all of our industry can come together," Heuer says. "And the serendipity of that happening is just phenomenal."

"We're Already Making Money"

It's also a place for entrepreneurs to showcase their new products. On Saturday, Adam Lavine, CEO of FunMail, based in Pleasanton, Calif., officially launched FunTweetit.com, which allows people to visually enhance their Twitter posts with pictures and graphics. "It's largely an experiment on our part to see how people react to it,'' he says. "It seemed like a fun thing to hook our Funmail wagon to."

Jonathan Marcus, founder of Flavors.me, based in Aventura, Fla., says 100,000 people have already created pages on the site, which began private testing last November. Flavors.me allows anyone to make an elegant Web site featuring real-time online social media services like Facebook, Twitter, feeds from blogs, Flickr accounts, Youtube videos and more.

Ryan Kelly, CEO of Pear Analytics, based in San Antonio, Texas, sells search engine optimization software called Sitejuice and has a booth at the show. His software targets small-business owners. "There are other software programs that go over their head,'' he says. "Our software takes it down a few notches."

At SXSW, Wes Wilson, CEO of Brandstack, also in San Antonio, launched Upstack, an online service that allows anyone to get a custom logo, Web site and other services.

And there's Ryan Russell, who created StarNine.com and its service called Wholinkstome.com, an online "reputation-management system." He began a year ago with a one-man operation, and now has 20 employees and is hiring more. He announced the launch of professional version of Wholinkstome.com at the show.

Says Russell: "There is something very unique and special about this city, and the character and charisma you find here." That goes doubly when SXSW Interactive sets up shop in Austin.